Apple shares go down, due to China’s blocking of a key iPhone plant

02.11.2022

Apple (AAPL) shares fell again Wednesday after Chinese authorities ordered a seven-day lockdown of a key iPhone manufacturing plant due to an ongoing covirus outbreak that could disrupt production ahead of the crucial holiday season.

City officials in Zhengzhou have ordered a lockdown, which will last through Nov. 9, in and around the Taiwanese Foxconn plant that employs 200,000 people, a key Apple assembler responsible for about 70 percent of the tech giant’s iPhone shipments. The number of infections in the city has tripled to about 360 this week, according to reports, prompting a strict lockdown that echoes Beijing’s “zero Covid” policy.

Foxconn said it would continue to operate the plant as part of a “closed-loop” strategy in which workers remain on site until the lockdown order expires, but they may have difficulty maintaining production levels as workers left the plant earlier this week in anticipation of the lockdown order.

Reuters reported Monday that November production at Zhengzhou could fall by 30 percent, but added that Foxconn is working on plans to increase production at its Shenzen plant to cushion the downturn now underway.